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CIRCULAR No

CIRCULAR No. 2-TC/TCT ON THE 4th OF JANUARY, 1995 GUIDING THE IMPLEMENTATION OF DECREE No. 89-CP ON THE 17th OF AUGUST, 1994 OF THE GOVERNMENT ON THE COLLECTION OF LAND USE LEVY AND LAND ADMINISTRATION FEE

Pursuant to Decree No. 89-CP on the 17th of August, 1994 of the Government on the collection of land use levy and land administration fee;

After consultation with the General Administration of Land;

The Ministry of Finance gives the following guidance for the collection of land use levy and land administration fee:

I. OBJECTS LIABLE TO THE COLLECTION AND PAYMENT OF LAND USE LEVY AND LAND ADMINISTRATION FEE:

1. Land use levy:

a/ The objects liable to land use levy comprise the public land which has been assigned by the authorized State agency defined in Articles 23 and 24 of the Land Law (hereafter referred to as the State) to organizations, households or individuals for use (except the cases stipulated in Period c/ of this Point) or the land assigned for use in agricultural production, forestry, aquaculture or salt production, and which is now allowed by the State to be used for other purposes as hereunder defined:

- The State assigns the land not yet used or not yet assigned to any organization, household or individual as stipulated in Article 72 of the Land Law (including land under illegal use) to an organization, household or individual, for use as stipulated by law;

- The State assigns land recovered from an organization, household or individual to assign to another organization, household or individual to assign to another organization, household or individual, including the land which was previously assigned to an organization and which is now recovered and assigned to a household or individual;

- The land which is used for agricultural production, forestry, aquaculture or salt production, and which is now allocated by the State to an organization, a household or an individual for use in other purposes as stipulated in Article 22 of the Land Law.

If the land organization which has been assigned land by the State for use in defense and security purposes, national or public interests, is now allowed by the State to use this land for the construction of dwelling houses and assign to a household or an individual for use and management, the area of land used for the purpose of house construction is subject to land use levy.

b/ The objects liable to payment of land use levy are the organizations, households and individuals (land users for short) that are allocated land by the State, or that are allowed to change the purpose of land use defined at Period a/ of this Point.

c/ The following cases are not liable to land use fee when allocated land by the State;

- The land allocated for agricultural production, forestry, aquaculture and salt production;

- The land rented by the State to the organizations and individuals that have paid land rent;

- The land with dwelling houses on it and owned by the State, and which has been sold to an individual or an organization, and its price already includes the land use levy and has been paid to the budget;

- The land of an organization, household or individual with a dwelling house on it which is being used legally (not be longing to the land encroachment cases) and which is now subject to the legalization of the land use right and house ownership.

2. Land administration fee:

a/ Land administration fee is the fee collected when the authorized State agency conducts one of the following jobs in land administration:

- Issuing the certificate of land use right (including the certificate legalizing the land use right);

- Certifying the changes concerning the land, including the certification of the change in the land use right, the change in the form and area of the land, and the change in the purpose of land use;

- Excerpting the land administration dossier, including maps or other necessary documents in the land administration dossier, at the request of the land user.

b/ All organizations, households and individuals, whether they are allocated land by the State or not, that have one of the affairs concerning land administration mentioned at Period a/ of this Point settled by the authorized State agency, shall have to pay land administration fee.

II. BASES FOR THE CALCULATION OF LAND USE LEVY AND LAND ADMINISTRATION FEE:

1. The bases for the calculation of land use levy are the land area (square meter) allocated or allowed to change the purpose of its use, the price of land per square meter at the time of the collection of the land use levy, and the exemption or reduction of land use levy.

The land use levy to be paid to the State budget shall be determined as follows:

(Land use levy to be paid to the State budget) = {(Land area allocated or allowed to change the purpose of its use (sqm)) x Price of one square meter} - (Exemption or reduction of land use levy)

The following should be taken into account:

a/ The land area allocated or allowed to change the purpose of its use is the land area allocated by the State to the land user, or the land area allocated for agricultural production, forestry, aquaculture or salt production which is now allowed for other uses; the land allocated by the State to an organization for use in defense, security purposes, national or public interest, which is now allowed by the State to be used for the construction of dwelling houses and assigned to households or individuals for use and management as prescribed by law;

b/ The price of each square meter of land used for the calculation of the land use levy shall be set by the People's Committees of provinces and cities directly under the Central Government, according to the price bracket of various categories of land issued by the Government in Decree No.87-CP on the 17th of August, 1994, and in conformity with the practical situation in the locality.

In case the land is offered for bidding, the land use levy is the price of the winning bid. The lowest price of the winning bid shall be equal to the price of land used for the calculation of the land use levy is the price of the winning bid shall be equal to the price of land used for the calculation of the land use levy for the land of the same category and location, set by the People's Committee of provinces and cities according to the price bracket of various categories of land defined by the Government in Decree No.87-CP on the 17th of August, 1994.

With regard to the land allocated for use in agricultural production, forestry, aquaculture and salt production which is now allowed for other uses, the land use levy is the price of land to be used for the purpose committed at the time of the land allocation.

c/ The exemption or reduction of land use levy is defined as follows:

Exemption or reduction of levy (in VND) = Land area allocated or allowed for other uses (sqm) x Price of land (VND/sqm) = Rate of exemption or reduction

The rate of exemption or reduction of land use levy shall follow the guidance in Item IV of this Circular.

2. The rate of fee collected for each kind of work in land administration is defined as follows:

Number Land administration jobs Unit Fee (in VND)

1. Issuing certificate of land use right: VND/certificate

a/ To households, individuals:

+ In mountainous and highland areas " 5,000

+ In midland and plain communes " 10,000

+ In urban areas " 20,000

b/ To organization: " 100,000

2 Certifying changes about land: VND/time

a/ For households and individuals

+ In mountainous and highland areas " 5,000

+ In midland and plain communes and " 10,000

urban areas " 20,000

3 b/ For organizations VND/one 5,000

Excerpting land administrative dossies document or piece of land

III. DECLARATION FOR PAYMENT OF LAND USE LEVY AND LAND ADMINISTRATION FEE:

1. Declaration and payment of land use levy:

a/ The land user who is liable to pay land use levy has the following obligations:

- To declare and supply to the tax agency where the levy is paid all the necessary documents related to the delermination of the land use levy. The time-limit for the declaration and the supply of the necessary documents shall not be longer than 15 days after he/she is notified by the authorized State agency of the land allocation or the permission to change the use of the land.

The declaration for payment of the land use levy shall be done in two copies, after the tax agency has determined the land use levy to be paid to the State budget: one copy to be kept at the tax agency, and the other shall be used as a notice of payment of land use levy to the land user.

- To pay fully the land use levy to the State as notified by the tax agency, before he/she is issued with the certificate of land use or the permit to change the use of the land.

- The persons, to whom the State allocates land belonging to the land fund for use in the construction of infrastructure works, shall pay the land-use levy according to a separate guiding document.

Procedures for payment of land use levy:

The land user shall base himself/herself on the notification of the levy to be paid written in the declaration of the land use levy sent to the tax agency. He/she shall directly make the payment (in cash or cheque) to the State Treasury. If the latter is not prepared to collect the levy from the land user, he/she shall directly make the payment to the Tax Agency.

During the payment, the payer shall have to mention in the payment bill the chapter, category, item and grade corresponding to the name of the land user (the person to whom the land is allocated or who is allowed to change the use of the land) defined in Item 28 on "land use levy" in the Table of Contents of the State budget, and the actual sum paid to the budget. Upon receipt of the money, the State treasury shall have to certify "already paid" to the payment bill, sign, seal and send it to the agencies concerned as prescribed by law.

In case the place is too far from the State Treasury which is not convenient to the payment of land use levy, the Tax Agency may directly collect the levy. When collecting the levy, it must issue the receipt to the payer, this receipt bearing code name CTT 11 issued by the Ministry of Finance, and apply the seal "land use levy already collected", under Item 28 about "land use levy" as prescribed in the Table of Contents of the State budget.

In case the land is allocated by the People's Committee of the district, provincial town or provincial capital according to the provision of the Land Law, the land use levy shall be collected by the Tax Sub-Department where the land is allocated, and by the Registration Fee Section of the Tax Department, if the land is allocated by the Government or the People's Committee for the province or city directly under the Central Government as provided for by the Land Law.

b/ The tax agency has the responsibility:

- To guide the land user to carry out seriously the declaration of the land-use levy;

- To check and certify the declaration documents, calculate and approve the land-use levy to be paid, the time limit for payment, the place of payment and notify the land user and urge him/her to pay the levy to the State budget according to schedule.

- To collect and remit the land use levy to the State budget in case the levy is directly collected by the Tax Agency.

The land use levy must be remitted to the State budget on the same day as it is collected. Remittance can be done later for the areas far from the State Treasury, but each remittance must be made at least once every ten days. If the total levy collected in one day exceeds one hundred million VND, all the revenue must be remitted to the State budget.

c/ The Land Administration Agency at various levels, and the State agency which issues the certificate of land use right shall have to cooperate with the Tax Agency in checking the implementation of the regime of collection and remittance of the land use levy according to regulations. It shall issue the certificate of land use right or the permit to change the purpose of land use, only after the land user has fully paid the land use levy written in the payment bill with the certification by the State Treasury agency (in case the levy is remitted to the Treasury), or the receipt of land use levy issued by the Tax Agency (in case the levy is directly collected by the Tax Agency), or the decision to exempt or reduce the land use levy in conformity with the land use levy to be paid already written by the authorized Tax Agency in the payment notification (the declaration).

2. Collection and remittance of land administration fee:

- The Land Administration Agency, the State agency having the authority to settle affairs concerning land administration mentioned in Point 2, Item 1 of this Circular, shall have to collect the land administration fee together with settling affairs concerning the land administration. It must issue a receipt to the fee payer.

- The receipt of land administration fee is placed under the unified management by the Ministry of Finance. The Ministry of Finance shall empower the Tax Departments in the provinces and cities directly under the Central Government to print, publish and use the land administration fee receipts in a uniform manner on the whole territory as currently prescribed.

The Land Administration Agency of the districts, provincial towns and capitals shall receive the receipts of land administration fees at the Tax Sub-Department where it has its office. The Land Administration Agency of the provinces and cities directly under the Central Government shall receive land administration fees (if any) at the Tax Department of the province or city. The Land Administration Agency shall have to mange, utilize, and settle the payment and accounts of the receipts and the land administration fees with the Tax Agency which has issued the receipts according to the regulations of the Ministry of Finance.

- The Land Administration Agency in the district shall collect land administration fees of each commune and ward. If it empowers the commune and ward to collect this fee, the commune or ward shall receive a commission which represents a percentage of the land administration fee already collected before remitting the fee to the State budget. More concretely, this percentage is 5% (five per cent) for Hanoi City and Ho Chi Minh City, and 8% (eight per cent) for other cities and provinces. The remaining levy after deduction of the commission (95% for Hanoi City and Ho Chi Minh City; 92% for other cities and provinces) shall be remitted to the district Land Administration Agency which, in turn, shall remit them all to the State budget.

The Land Administration Agency in the district shall have to use accounts and receipts and vouchers to keep tabs of the situation of the collection and remittance of land administration fees in its territory, organize the timely collection of land administration fees in the communes and wards, and remit all of the fees collected in the previous month by the tenth day of each month at the latest to the State budget at the Treasury where the Land Administration Agency has its office, and record them into the chapters, corresponding chapter, kind, item and category in Section 35 concerning the "fees" on the Table of Contents of the State budget.

If the Land Administration Agency of the province or city directly under the Central Government conducts affairs concerning land administration, it shall have to collect the land administration fee while carrying out the land administration appraise, and to remit the levy fee to the State budget at the Treasury where the transaction takes place, within the time-limit prescribed for the district Land Administration Agency.

- The Tax Agency at all levels shall have to cooperate with the Land Administration Agency in supervising the implementation of the regime of collection and remittance of land administration fees to the State budget as provided for in this Circular.

IV. EXEMPTION OR REDUCTION OF LAND USE LEVY:

1. Land use levy exemption shall apply to the following cases:

a/ The land is allocated for use in public utility works, and for defense and security purposes, as stipulated in Article 58, Item 1 of Article 65 of the Land Law (except when the land is used for the construction of dwelling houses by households or individuals). More concretely:

- The land allowed by the authorized State agency to be used for public purposes including land for construction of roads, bridges, culverts, pavements, water supply and drainage systems, rivers, lakes, dykes, dams, schools, hospitals, markets, public parks, flower gardens, recreation centers for children, public squares, stadiums, airports, sea and river ports and other public utility works as prescribed by the Government.

- The land allocated by the State for defense and security purposes, including:

+ Land for the stationing of troops;

+ Land for the construction of air and naval bases, and other military bases;

+ Land for the construction of national defense works, simulated battlegrounds and special purpose projects;

+ Land for the construction of military stations and ports;

+ Land for the construction of industrial, scientific and technical works in service of national defense or defense-economic purposes;

+ Land for the construction of store houses of the armed forces;

+ Land for the construction of firing ranges, drill grounds and weapon testing grounds;

+ Land for the construction of schools, hospitals and sanatoria of the armed forces;

+ Land for the construction of other defense and security works defined by the Government.

b/ Residential land in the rural communes in the mountainous areas, sea islands, and the areas for sedentarization and the construction of new economic zones as prescribed by law.

c/ Land used as compensation to the organizations and individuals whose land is recovered by the State. The value of the allocated land must be equal or lower than that of the recovered land.

In case the value of the compensation land is higher than that of the recovered land, the land user shall have to pay for the difference in the value of the allocated land and the recovered land (value of the allocated land minus the value of the recovered land).

2. The residential land for persons with meritorious services to the revolution and the beneficiaries of other preferential policies, to be applied according to separate regulations of the Government.

The exemption or reduction of land-use levy mentioned in Period b/ of Points 1 and 2 of this Item shall be determined on the basis of the actual land area allocated to each household or individual. However, such exemption and reduction can be effected only within the limit for residential land stipulated in Articles 54 and 57 of the Land Law.

Each person, who enjoys exemption or reduction of land use levy mentioned in Points 1 and 2 of this Item, can benefit such exemption or reduction only once, when the State allocates land to him/her (except when the land allocated is recovered, in which case the provision stipulated in Period c of Point 1 of this Item shall apply). In all other land allocations, including supplementary allocations of land area and irrespective of the number of the times of allocation, the land user must pay land use levy as stipulated in this Circular.

Procedures in the exemption or reduction of land use levy:

The land user eligible for land use levy exemption or reduction stipulated in Points 1 and 2 of this Item shall have to produce to the Tax Agency the dossier and fill the following procedures:

- To make a declaration to the Tax Agency according to the set form;

- To send an application for land use levy exemption or reduction, and state the reason and the number of times of exemption or reduction he/she has enjoyed earlier.

The application of a household or an individual must have the certification by the People's Committee in the ward or commune where he/she has a permanent residence permit.

- The notification of land allocation or the permit to change the purpose of land use issued by the authorized State agency. The notification must clearly state the name of the land user, the reason for which he/she is allocated land, the purpose of land use, the location, category of land, land area and the time limit for its use (if any).

- Other related papers to certify that he/she is actually eligible for land use levy exemption or reduction, such as: the decision of the State agency to authorize the construction of a project using the land eligible for land use levy exemption or reduction, the decision to recover the existing land and to compensate with another piece of land, the certificate that he/she is a person having meritorious services to the revolution or a beneficiary of preferential policies (a notarized copy)...

After receiving the dossier and the application for levy exemption or reduction, the Tax Agency shall verify the dossier and compare it with the declaration. If it finds that the concerned person is actually eligible for land use levy exemption or reduction and has never enjoyed such exemption or reduction, it shall agree to exempt or reduce the land use levy for the land user, within the limit of the land area stipulated in Articles 54 and 57 of the Land Law. The exemption or reduction must be done in a written document according to the following jurisdiction:

- The Tax Department has authority to exempt or reduce land use levy for the organizations, households or individuals to whom the Government or the People's Committee of the province or city directly under the Central Government allocates land as stipulated in the Land Law;

- The Tax Sub-Department has authority to exempt or reduce land use levy for the households and individuals to whom the People's Committee in the district, provincial town or capital allocates land as stipulated by the Land Law.

V. HANDLING OF VIOLATIONS AND REWARDS:

1. If the land user does not fully comply with the procedures on the declaration, or does not pay fully the land use levy and land administration fee according to the stipulations in this Circular, he/she shall be refused land allocation, will not be issued with the certificate of land use or the permit to change the purpose of the land use.

2. Any organizations or individuals, that abuse their positions and powers to misappropriate or embezzle, or otherwise cause loss of the land use levy and land administration fee, shall have to make compensations to the State for the full amount of money they have misappropriated, embezzled or caused to be lost, and shall, depending on the extent of the violation, be disciplined or investigated for penal liability as prescribed by law.

Any Tax Agency or Land Administration Agency, which wrongly determines the land use levy or the land administration fee to be paid, shall have to return to the payer all the amount of money which has been wrongly levied on him/her within 30 days at the latest, after the error is detected.

3. Those Tax and Land Administration Agencies and officers that well accomplish the tasks assigned, and all those who have the merit of detecting acts of violations of the stipulations in this Circular, shall be commended and awarded according to the common regulation of the State.

VI. ORGANIZATION OF IMPLEMENTATION:

1. The Tax Agencies at various levels shall have to cooperate with the Land Administration Agencies in guiding and organizing the collection of land use levy and land administration fee in conformity with Decree No.89-CP on the 17th of August, 1994 of the Government and the guidance in this Circular.

2. The Ministers, the Heads of the agencies attached to the Government, the Central Agencies of the Party, and mass organizations, and the Presidents of the People's Committees in the provinces and cities directly under the Central Government are requested to guide and inspect and assure the correct implementation of the stipulations in Decree No.89-CP on the 17th of August, 1994 and the guidance in this Circular.

3. This Circular takes effect as from the 17th of August 1994. In all the cases where the land allocations and the permits to change the purpose of land use were carried out from the effective date of the Land Law (October 15, 1993) to the 17th of August 1994, if the land use levies are not yet collected, the stipulations of the Government shall apply. All the earlier regulations which are contrary to Decree No.89-CP and the guidance in this Circular are now annulled.

In the process of implementation, if any difficulties arise, the agencies concerned are requested to report in time to the Ministry of Finance for study and settlement.

Minister of Finance

HO TE